SMM Weekly Review on Scrap Copper Consumption Advantages (Jun. 11-15)

SHANGHAI, Jun. 19 (SMM) –SHFE near-term copper contract prices were higher than forward copper contract prices last week. The price spread between SHFE 1206 and 1207 copper contracts remained relatively wide as the delivery day for June contracts approached. Spot copper premiums thus fell to RMB 20-100/mt last week, down from RMB 200-400/mt from the previous week. Spot refined copper averaged RMB 54,856/mt last week, while bare bright copper (including tax) averaged RMB 54,174/mt, causing their price differential to narrow further. Although importers have recently accelerated overseas purchases, China's scrap copper supply is still tight and is likely to remain so for the near term. This has left very little room for the price differential between scrap and refined copper to widen, meaning also that the price advantage of scrap over refined copper will remain understated.